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From the Editor: Is grad school the answer in a poor job market?

June 1, 2009


Photo by Vitaly Nikolaev

Photo by Vitaly Nikolaev

Last month, I watched many of my friends still in school struggling to finish papers and meet deadlines – that crazy end-of-term crunch I absolutely do not miss.  As the job market continues to be hyper-competitive, however, and statistics are filled with an increased numbers of people opting to go to grad school, I’ve started to think about trying for an MA or MFA for myself (again).

In today’s job market, new grads have to do anything they can to add to their qualifications.  I’ve done that by freelancing and managing The Talking Twenties, but these are long-term oriented career moves that are less likely to fulfill immediate, urgent needs, like bills, health insurance and basic costs of living.  I know a lot of grads and twenty-somethings who have had to settle for positions that pay less or aren’t quite on their career path, and their story is the same.  Isn’t grad school a better option than that?

Of course, the big problem with that is that grad school ain’t cheap!  A recent study of 40 U.S. colleges (reported by MSNBC) found that 22 percent of students were anxious about their weekly finances, and almost 1 in 5 students elected to go to graduate school because they weren’t confident in their ability to find a job with only an undergrad degree.

While graduate school creates a temporary safety net of loan deferment, it also adds a lot more financial worry once those two or so years are up.  I know people with Master’s degrees who are still in career limbo, or just getting by.  You probably do, too.

Last year, I was one of those people banking on grad school, trying to get some specialized skills and hoping for better chances on the job market.  I went to the city where my school was located, armed with my acceptance letter and with my deposit paid, and the result was a great big higher-ed wake-up call.

The cost of rent for the area was significantly higher than what the school and their housing search site listed – and, mind you, Stafford Loans only cover $20,500 per year for graduates or professionals, and GradPLUS Loans are only available up to the school’s projected cost of attendance.  I realized that, even if I could manage to live off of the funds and loan money I had, the possible jobs I could have gotten with my Master’s degree would not allow me to repay my loans.  Besides that, financial aid and scholarships were so competitive that I hadn’t gotten a cent from the schools at which I was accepted.

Loans are a tricky business for any student these days.  Stafford Loans usually must be repaid within 10 years — take $20,500 for two years and you’ll start with a minimum monthly payment of $341.67, not counting interest.  GradPLUS loans begin repayment 60 days after graduation, or a drop below half-time attendance, and also borrow at a higher rate than Stafford, with 8.5% interest that starts adding up right after final disbursement.

Private loans aren’t so promising, either.  According to Jonathan D. Glater of the NY Times blog, a 2008 survey by the National Association of Independent Colleges and Universities found that “students have run into trouble finding private loans, which are not guaranteed by the government. Those typically carry variable interest rates and usually require a credit check. As banks and other lenders have raised credit standards, more and more borrowers fail to qualify for private loans; at the same time, there are fewer companies offering them. Several companies have dropped out of the private loan business.”

It can be hard for some students to get loans, but schools also always caution students to carefully evaluate whether they’ll be able to repay them.  These days there are so many uncertain factors (Will I be able to find a job?  Will that job pay enough to cover my loans and other bills?) that grad life is at least as stressful as sweating it out on the job market.

It all goes to show you – there’s no such thing as hiding from a bad economy.  It’s up to the individual to decide which path – the job market or a higher degree – is the right answer for his or her career and financial future.  After all, grad school will be there in a couple years, and with any luck the jobs will be, too.

— keito, The Editor

June 1, 2009

  1. June 1, 2009 8:56 pm

    Grad School is NOT the answer for better jobs.
    Well, not always, as some jobs do require grad school to provide a smoother introduction.

    On average, the starting pay for Undergrads is about 200,000JPY, and for masters/ph.d, it’s 220,000JPY. 20,000JPY raise is not that much, and some companies don’t even differentiate between the two.

    In the job market, performance is worth more than the degree, I think.

  2. Julienne permalink
    June 8, 2009 10:34 am

    You’re right – performance can be the key; although not always. We have to remember that there are some jobs that require higher education – legal, medical, education.

    For all those interested in a practical job option, which provides funds for school and loan deferment, look for my forthcoming article on national service.

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